Saudi Arabia’s ACWA Power, in a consortium with South Korea’s Taekwang Power Holdings, has signed a $2.2b investment agreement with Vietnam for a 1,200MW thermal power plant, reported Reuters. The Nam Dinh 1 plant, located in the northern province of Nam Dinh, will be built on a build-operate-transfer basis for 25 years. The project has been under negotiation for the past eight years and is slotted to start in mid 2016.

The plant will use coal as its feedstock, provided by the state coal mining group Vinacomin. The deal also comes at an opportune time given that Vietnam is facing power shortages and its electricity demand rose by 6.7% in 2015, higher than in the previous five years.

The Ministry of Industry and Trade has signed the deal in a bid to aid the economic development of the northern provinces and ensure national energy security, according to Vietnam Breaking News. The ministry has called on the consortium members to promptly complete investment license procedures, while also urging Nam Dinh to make its own preparations for measuring, compensation, and land clearance work. This would insure the speedy execution of the project on the Vietnamese side.

ACWA’s Chief Investment Officer described this deal as company’s first project in Vietnam. No figures were forthcoming for the exact share of the investments between ACWA and Taekwang.